AFI Viewpoints: Managing the Twin Responsibilities of Financial Inclusion and Financial Stability

The global financial crisis of 2008 proved that sound macroeconomic policies, low inflation and low or no budget deficits do not necessarily create economies that can weather financial instability. Surveys conducted after the financial crisis have shown that economies with resilient financial sectors and high economic growth are also no guarantee of balanced and inclusive growth. This has become all too clear in times of disaster, such as Typhoon Haiyan in the Philippines, when the poorest and most vulnerable were still not protected by a stable national economy. In these times of financial, economic and social crisis, policymakers have recognized the powerful links between macroeconomic stability, financial stability and financial inclusion in achieving balanced and inclusive economic growth. As economies recover from the global recession, the need to harmonize financial inclusion and financial stability objectives has become even more pronounced. The concept of financial stability is gaining traction in the macroeconomic frameworks and policies of both developing and developed countries, and leaders and policymakers are making public, high-profile commitments to financial inclusion through initiatives such as AFI’s Maya Declaration. This AFI Viewpoint, “Managing the Twin Responsibilities of Financial Inclusion and Financial Stability”, reflects on country experiences and trends in this area at both global and national levels. Although the paper shares the experiences of particular countries and studies, the objective is not to propose a ‘one size fits all’ model or recommend a single approach. Rather, the aim is to reflect on a range of approaches and perspectives.